' The petitioner which is a limited company, impugns an undated notice issued on behalf of the City District Government (CDG), Lahore, demanding payment of Rs.42,986 from the petitioner on account of property tax. The impugned notice has purportedly been issued by some assessing authority of the CDG, Lahore, under Rule 45 of the Punjab Urban Local Council Immovable Property Tax Rules, 1999. Initially when this petition was filed, the grievance of the petitioner was that the CDG, Lahore had no authority to impose, assess and recover a tax on immovable property owned by the petitioner. A reply and parawise comments were submitted by the CDG, Lahore, wherein it was asserted that the CDG was acting only as a collecting agent and the impugned tax, in fact, had been imposed by the Town Council of Iqbal Town, Lahore. In these circumstances, the petitioner had prayed for and was allowed to file an amended petition. In the amended petition, the Town Council, Iqbal Town and the District Coordination Officer were impleaded as respondents Nos.5 and 6, respectively.
2. It has, firstly, been contended on behalf of the petitioner that the impugned tax cannot be recovered from the petitioner because the essential mandatory requirements of section 116 of the Punjab Local Government Ordinance, 2001 have not been complied with. In order to appreciate this contention, section 116 is reproduced as under:-- "116. Taxes to be levied.---(1) A Council may levy taxes, cesses, fees, rates rents, tolls, charges, surcharges and levies specified in the Second Schedule through a notification in the official Gazette. _(2)No tax shall be levied without previous publication of the tax proposal after inviting and hearing public objections.
(3) The Council may increase, reduce, suspend, abolish, vary or exempt a tax, in the manner as specified under subsections (1) and (2): ' Provided that the taxation proposals of a local government shall first be vetted by the Government prior to the approval of these proposals by the respective Council, within thirty days from the receipt thereof failing which it would be deemed to have been vetted by the Government."
3. According to learned counsel, neither a notification, as required by subsection (1) of section 116, has been made in the official Gazette nor has previous publication of any tax proposal been issued nor objections solicited thereon in terms of subsection (2) of section 116.
4. Learned counsel for the CDG has, however, stated that under section 117 of the Punjab Local Government Ordinance, 2001, the requirements as to the Gazette notification and prior publication of tax proposal were not required, when the impugned notice was issued. At this point, it may be noted that section 117, as originally enacted, did not make a reference to section 116. However, through the Punjab Local Government (8th Amendment) Ordinance, 2002, enacted on 5-10-2002, it was specified in section 117 that the rate of property tax shall be determined, inter alia, by a Town Council subject to the provisions of section 116. On this basis, it was argued that the provisions of section 116 were not attracted in the present case.
5. I am unable to agree with the aforesaid submission. First of all, it is to be noted that the impugned notice demanding tax from the petitioner is undated. It, therefore, cannot be said on the record if the said notice was issued prior to or subsequent to the amendment in section 117, referred to above. The writ petition itself appears to have been A filed after the amendment aforesaid and was first fixed for hearing on 8-11-2002. This, prima facie, indicates that the impugned notice was issued subsequent to the amendment and was immediately challenged through the present writ petition.
6. Even. If the impugned notice was prior to the amendment, this may not be of any avail to the CDG, Lahore. The provisions of section 116, reproduced above, are categorical and unambiguous. It is under section 116 that the powers to levy a tax has been granted to a Town Council. The provisions of section 117 are merely subsidiary to those of section 116. This would be evident from a bare reading of section 117, which confines itself to a determination of the rate of property tax in an area. The calculation of tax may constitute the tax proposal mentioned in section 116(2), reproduced above. Section 117, therefore, cannot be construed as dispensing with the requirements of section 116.
7. Learned counsel for the CDG, Lahore next argued that the tax proposal was, in fact, publicized in the daily 'Jang' and daily 'Nawa-eWaqt' and objections were solicited from the public-at-large. I have gone through the said notices, which have been placed before me today. In the first instance, it may be noted that the said notices in the press do not specify, with any certainty, the areas in respect of which the same have been issued. Furthermore, the issuer of the notices is also not apparent. Under the said notices, the names of Ch. Ataullah, Assessing Authority and Sheikh Muhammad Ramzan, Assessing Authority have been mentioned. The notices, however, do not indicate as to which Government is being represented by the Assessing Authotity. In the circumstances, Syed Riaz Hussain, who is an employee of the Excise and Taxation Department of the Provincial Government, stated that the aforesaid persons were purporting to act as Assessing Authority on behalf of the CDG, Lahore. This much can also be established from the impugned notice itself, which has been issued under the signatures of an Assessing Authority of CDG, Lahore.
At the head of the impugned notice also, it is the CDG, Lahore, which appears as the issuing authority.
8. From the above circumstances, it is abundantly clear that the Town Council of Iqbal Town has not issued the notices appearing in the, daily 'Jang' and daily 'Nawa-e-Waqt'. The said notices, therefore, cannot be treated as having been issued by the Competent Authority i.e. Iqbal Town Council.
9. At this juncture, it may be noted that the CDG, Lahore, by its own admission, is merely a collecting agent in accordance with the terms of section 118 of the Punjab Local Government Ordinance, 2001.
Section 118 stipulates that the District Government shall collect property tax. This section also provides that the District Government may retain 10% as collection charges and shall promptly transfer the balance 90% to the Town Council concerned. As such, the CDG, Lahore was a mere collecting agent having the limited duty, set out in section 118. It had no power, at all, either to make an assessm ent or to determine the rate of tax to be levied. In the circumstances, I am not in any doubt that the notices which appeared in the daily 'Jang' and daily 'Nawa-e-Waqt', were not pursuant to or in compliance with the provisions of section 116, reproduced above.
10. As to the requirement in section 116(1) that the.Tax be notified in the official Gazette, learned counsel for the CDG, Lahore had no answer. Before me, there is no notification in the official Gazette. For this reason also, the levy and demand of the impugned amount from the petitioner on account of property tax, is not legally sustainable.
11. Here, I may also point out that the area in which the petitioner's factory is located, was not included in any of the rating areas which had been prescribed under the Punjab Urban Immovable Property Tax Act, 1958. It is only as a result of the provisions of the Local Government Ordinance that a Town has been prescribed as a rating area within the meaning of the term as given in the Punjab Urban Immovable Property Tax Act, 1958. It is perhaps for this reason that in the notices appearing in the press issued by the Assessing Authority, CDG, Lahore that the term "extended area" {{URDU TEXT}} has been mentioned. Therefore, even the provisions of section 185 of the Punjab Local Government Ordinance, 2001, which to a certain degree has saved taxes which were being levied previously, has no application in the present case.
12. In view of the foregoing discussion, I find that the impugned notice is illegal having been issued without any lawful authority. This petition is allowed in these terms.